First things first – what is Alibaba Trade Assurance?

Well it’s a service run by Alibaba that’s “designed to help create trust between buyers and suppliers.” Trade Assurance covers eligible orders on Alibaba.com with full payment protection if either:

The quality of your products do not conform to the agreed standards;

OR

The supplier fails to ship your products on the agreed shipment date.

Sounds good, right? But, how much does Alibaba Trade Assurance cost to use?

It’s 100% FREE – and by free, I actually mean free – for both buyers and sellers, so it doesn’t add any cost to your order at all even though it’s basically an insurance in case anything goes wrong.

However, Trade Assurance doesn’t cover all orders on Alibaba – as it’s only eligible for suppliers who have signed up to the service and promise to abide by the Trade Assurance rules.

You can easily see which suppliers/products are covered by Trade Assurance by looking out for the Trade Assurance logo when searching for products and suppliers on Alibaba.

In this example search (and no, I don’t suggest you actually start selling iPhone cases!) you can see that while the first listing isn’t covered by Trade Assurance, the second one is:

When you hover over the Trade Assurance logo, you’ll be able to see another very important piece of information – the coverage amount for that supplier:

This is also known as the supplier’s Trade Assurance limit and this amount is set by Alibaba, not the supplier! It’s based on the supplier’s qualification status and also their historical sales volume, so the higher this amount the better really.

Just to be clear – you’ll only be covered up to the Trade Assurance limit amount for your specific supplier. So if their limit is $20,000 and your order is worth $30,000 – then you’ll still only be covered up to $20,000.

But in practice this is never really a problem as the vast majority of the time the Trade Assurance limit will be well above your order amount anyway.

Okay, so now that we’ve covered what Trade Assurance is, who it applies to and the coverage amount – how do you actually use the Trade Assurance service?

Here’s how it works:

1) Find a supplier

Search for a supplier with the Trade Assurance icon and check that your order amount is within their Trade Assurance limit.

2) Negotiate and confirm your order

Agree on all aspects of your order – such as price, the total amount to be covered by Trade Assurance, payment terms, shipping date, and if you want to be covered for product quality, select either pre-shipment or post-delivery coverage and make sure your quality requirements are contained in the contract.

3) Make payment

Confirm the Trade Assurance contract and make payment via Alibaba.com

Now we’ve already covered finding a supplier who’s enrolled in the Trade Assurance service, but I want to talk more about point no.2 as it’s actually the most important part of Trade Assurance.

What exactly do Alibaba mean when they say “make sure your quality requirements are contained in the contract”?

The answer to this is very, very important – the Trade Assurance coverage is based on the details that you and your supplier agree in your purchase contract.

You can’t start a claim for late delivery unless you specify a delivery date for your order.

You can’t start a claim for product quality unless it’s against a specific and measurable detail, as laid out in your contract.

For example, you can’t say the colour is wrong unless it’s specified exactly what colour the products should be in your contract.

And you need to be as accurate as possible – don’t leave anything up for interpretation! If you’re ordering some children’s tablets and you say “long lasting battery” and they arrive with 2,000 mAh batteries, then there’s nothing you can do.

However, if you specify that the tablets should have batteries that are at least 3,000 mAh then you would be able to make a claim!

You need to be as specific and detailed as possible in your contract.

Specify all of the following:

The shipment date

The size of the product

Quantity

The materials to be used

The colour

The packaging

The branding

etc.

And anything else that is important/that you can think of!

Also – include images! Images of samples, images to illustrate what you’re expecting… these are both incredibly useful.

And the thing about this is that this is good practice anyway. Yes, you have to do this if you want to be fully covered under Alibaba Trade Assurance but it’s what I recommend you do with every order from China anyway!

There’s honestly no downside to doing this – it makes your expectations clear, it makes your supplier’s job easier, and it’s essential for both your pre-shipment inspection as well as for settling any disagreements or disputes.

So please don’t take this part lightly as it is the most important step when ensuring your order from China is protected by Trade Assurance.

Next, let’s look at the two different types of cover and which one you should opt for.

Pre-shipment coverage vs Post-delivery coverage

Previously to be eligible for Trade Assurance you had to organise a pre-shipment inspection – it wasn’t like eBay or Amazon where you could receive and inspect the goods yourself before making a claim and really that was completely fair – after all this isn’t a retail site – these are b2b, wholesale orders travelling thousands of miles!

However, even taking all of that into account, Alibaba have now made it possible to instead have “Extended Trade Assurance until Arrival at Port/Place of Destination”.

But I actually don’t recommend this at all. I strongly suggest you stick with the typical “Trade Assurance up to Shipment Date”. The reason for this is very simple – if there’s a dispute, then Alibaba will designate an inspection company to come and inspect the stock and write a report, which is what Alibaba will then use to make their decision.

You, as the buyer, as responsible for paying for this inspection initially (it is refunded to you if the claim is later found in your favour) and as I’m sure you can imagine, the cost of doing this in the UK is many times more expensive than doing it in China.

Plus it’s just so much easier to deal with any problems when the stock is still with your supplier – particularly if you’ve agreed 50/50 payment terms where half the money is paid upfront and half is paid prior to shipment. That way you have more leverage and you can work on fixing any issues directly with your supplier, rather than having to go through Alibaba.

So that’s why I always recommend going for pre-shipment coverage and arranging a pre-shipment inspection in China before you’ve paid for your products and before they’re shipped to you.

I’ve covered pre-shipment inspections in great detail previously, so if you need any help with that, please take a look at these posts:

What payment methods are available for a Trade Assurance order?

You have three different options for payment:

1) E-Checking

This is the payment methods recommended by Alibaba. You create an account online and transfer money directly to the company’s designated bank account. It has a fixed transaction fee of $15. (currently only available to people in the US).

2) Credit Card

This is the payment method I suggest if you want complete protection. It does have a transaction fee of 2.8% (so it’s more expensive than e-Checking for orders above $540) but at the same time it means that you always have the option of starting a chargeback with your bank/card company if everything else fails.

3) Telegraphic Transfer

Lastly there’s the option of simply transferring the money directly from your bank account to the company’s designated Citibank account.

So we’ve now covered pretty much everything you need to know about Alibaba Trade Assurance apart from something that you will hopefully never need – how to make a claim!

As I’ve mentioned a few times, even if you have Trade Assurance, you should always try and resolve any issues directly with your supplier. Most of the time if will be a genuine mistake and they’ll be more than happy to alter/fix/replace it for you.

If however you’re very unlucky and that isn’t the case, then you have no choice but to get Alibaba involved.

The process for opening a dispute is actually very simple:

Login to My Alibaba > Go to Order Management > Click on All Orders and from there you can select to Open a dispute.

After you submit a dispute, your supplier has 3 days to respond. If the supplier doesn’t respond within 3 days, you can escalate the dispute manually. If you or the supplier don’t respond within 7 days, then it will be automatically escalated.

You then have to pay for one of Alibaba’s three designated inspection companies to perform an inspection of your order. These three companies are:

Bureau Veritas, TUV Rheinland, and SGS.

These companies will carry out an inspection based on the details in your contract (hence why that is so important!).

They’ll follow international industry standards in terms of the number of samples and the maximum allowed no. of defects:

AQL 4.0 refers to Minor Defects – i.e. a defect that does not reduce the usability of the product, can be noticed only after careful examination, and may reduce the saleability. It is a workmanship defect beyond the defined quality standard.

AQL 2.5 refers to Major Defects – i.e. a defect that is likely to result in failure, reduce the usability and saleability and can easily be detected by the customer.

Then there is also AQL 0 – Critical Defects – i.e. a defect likely to result in a hazardous or unsafe condition for an individual using the product or fails to meet mandatory regulations. There are no AQL 0 defects allowed at any lot size.

After they’ve completed their report, it will be sent to both companies and Alibaba will then use it to make a decision on the dispute.

If your claims were found to be correct, you’ll be refunded your order amount as well as the amount you paid for the inspection.

And there you have it! An eBay/Amazon like dispute service, but for Alibaba.com.

And before anyone points out that there aren’t so many requirements for making a dispute on eBay or Amazon… that’s just common sense! Alibaba is a site for bulk, business orders so it would honestly be crazy to expect the same level of buyer protection as you get on marketplaces like eBay and Amazon.

In my opinion Alibaba Trade Assurance is still an amazing service and a great extra layer of protection. Even if you never have to actually make a claim, the whole idea of creating a contract that details all of the order expectations between you and your supplier will result in higher product quality and significantly less issues.

That’s all for today!

I’ll see you on Friday for this week’s Reader’s Question post.

All the best,Andrew

Spread the love

Search for:

Amazon Sharks FBA UK

Closed group · 1,527 members

Join Group

Hosted by Andrew Minalto - online seller with more than 15 years of experience. In this group you can ask questions, discuss everything about Amazon F...

if my customs is seized by customs do i have good chance to win a dispute with alibaba trade assurance? It is a supplement that is allowed to shipped into Sweden but ut was seized by German customs in transit with DHL because it is against German rules to import it even if it is sold in Germany. It is not a medical supplement but a so called nootropic. I am wondering if alibaba will reimburse me?

I’ve made a purchase through Alibaba, the machine that I ordered is not the one that I have received and it has been a nightmare apply for a refund. My sales contract was very simple and not very detailed at all. The machine might be correct but the mold is definitely not the one that I ordered. The only proof is the conversation that we had on the chat. Alibaba is asking me to pay for an inspection which is 500 dollars to test out the suppliers quality and they are not accepting my chat. What is the chances that I will be refunded anything if I do pay for the inspection.

I have a question regarding trade assurance. I buy the goods from supplier with trade assurance under EXW terms. Then I use a freight forwarder I found myself to ship the goods DDP, also with trade assurance.

Question: If there is an issue, such as lost shipment or damaged during shipment, am I covered for the entire amount (product cost paid to supplier + freight forwarder cost)? Both contracts are under trade assurance.

Great article, this has saved our bacon. I was wondering how to fully setup trade assurance and what we needed to do to protect ourselves. I hadn’t even been thinking about an inspector or a contract, go figure! Getting into this process you don’t know everything that needs to be done. We are almost there on sending in our first order for 2000 units and are happy that we found this information to help protect us.

Having said that, you don’t by chance have a good or a simple contract or a reference to one that we can use for plush dolls?

No, sorry, I don’t have such a contract I can share… each and every situation/product is totally different anyways…

Make sure you do the pre-shipment inspection – that’s the most important part here. And do it before you make the 2nd payment of course, so that supplier is motivated to do a good job and deliver quality product.

Hello! I submitted an request for a sample of 1 product and so I paid $50 as the seller asked me to. There’s a Trade Assurance Contract. After I paid, the seller said that the minimum is 1000 pcs, which is not what I was looking for. I’m still hoping to receive the sample since I paid for it, but I was wondering if I will be charged for the 1000 pcs after the ‘initial payment’, which was the $50. I’m worried about being charge +$10000.

Hi – Great thread.
I ordered some electric bikes back in February stating that it was important that they arrived within 30 days. It is now 10 may and the due date is 6 June.
This has massively inconvenienced me and impacted my business. It is showing as a late shipment on alibaba, is this sufficient grounds for a claim of breach of contract? The bikes are now on the water – i am looking forward to receiving them but i feel need compensation as we have had to hire bikes in the interim because of the late shipment. Also how much should i claim? I know what the loss of earnings amount is, maybe it should be at least this figure?
Thanks in advance

How many days do I have to file a dispute? I have a custom design that is patent pending. The vendor confirmed they could make this product exactly like the patent pending design. I ordered 2 samples, which were shipped out. When I received them, they were nothing like the patent pending design. After almost 2 weeks of the vendor going back and forth with his team of workers, he determined he can not provide the blanket exactly like the design he originally said he could make. The vendor has wasted so much time, possibly on purpose, that he’s already received his payment through Trade Assurance. Can I still dispute these charges?

Hello Andrew,
I found my order. The order is closed. I still have another 2 weeks, for my 30 day refund period to expire. I am giving the supplier one more day to reply to my issues. If he does not, I am going to dispute the charges. Can you tell me where/how I go about doing this?

I have a dispute that has been going on since January. The issue is the factory said they had a specific certification, UL certification which they did not. Unfortunately, my specifications only referenced the certification but did not spell it out. The other item is my purchase order notes specified a ship date of December 19th, 2017, but this date was not listed in the “ship date” field of the trade assurance order but was spelled out in the notes of the Trade Assurance order. For what every reason Alibaba has not been willing to protect my order. Do you have any advise on getting a refund?

Hi Andrew. I see that you are familiar with Trade assurance process. I need a help about Trade Assurance dispute. I opened dispute and now is ongoing. The supplier ship my item more than month ago by air freight EMS-Parcel Force. They (supplier) claim that he does everything he could (including sending an invoice with the goods for 75$ the actual cost of the item is 535$ I never ask him to lower the invoice amount) and now the status of the item is Awaiting custom clearance. I have received an email from Parcel Force basically saying if after 4 weeks(already gone) you have not received your item and have not been contacted by the Customs(I contacted them no requirements for any papers) I have to contact the sender. It seems that the Alibaba is keen to reject my claim because the item has arrived in UK.
I have received the goods from the same supplier before – twice(exactly the same order – delivery time 2 weeks) -with no problems and no intervention by me.
It seems that I am going to lose that dispute
Any advice please ?

Hi. That is the point. Parcel Force does not say item lost and the tracking info says Awaiting Custom clearance ” If after four weeks the item has not been received and Customs have not contact you we would need to refer you to the sender as there is nothing further we can do. ” – Parcel Force emailed me. No contact from Customs .
The sender claims that they done all their best to help me.
Alibaba says that the item is in my country and it is my ability to do the custom clearance. What custom clearance since no one asking me for any paper plus I already received more than 2 exactly the same orders with no action by me.
Any help will be appreciated?
Thanks

Hi. Thanks. I spoke with HMRC and they said that my item has been checked by Border Force twice but they did not come up with any decision more than 1 month. They do not required any documentation by me. HMRC says that there is no Border Force deadline to make a decision. And they refer me to Parcel Force again. When I reach Parcel Force they refer me to HMRC. It is a vicious circle for me. Regarding the Alibaba Trade Assurance since the case has been escalated and I uploaded evidence and comment – the supplier did not upload anything – the page said at that time – 48 hours to determination. But after 48 hours Alibaba extend with another 5 days for uploading evidence instead of making final decision. I cannot get why? Their answer bellow:
“We checked they had sent goods to you through ……………….,we can see the goods had been arrived to your country ,please contact with your local post office to check this parcel. And we suggest you can wait patiently cause goods arrived to your country ,that supplier can not do anything . Your understanding will be highly appreciated”
I had uploaded a mail by Parcel Force that they cannot do anything else and refer me to the sender. And the Alibaba answer sounds ridiculous for me since the goods are not with me more than 50 days and that is a trade assurance which supposed to cover me if I do not receive my parcel
Apologies for my spelling in advance
If you could give me any advice what I should do in that situation ?
Thank you

Hi. I would like to share my experience with Trade Assurance. Alibaba has closed the case with no refund nevertheless I did not receive my item. The reason was that it is in my country with customs and the supplier cannot do anything, even after 56 days of dispatching by air. Which basically means that ones the supplier has sent the goods You`ll never be covered by Alibaba Trade Assurance.

Hey Andrew,
You are just doing an amazing job, but can you please help me out with this. This is supplier who mailed me and i am interested in his products. Now AliPay is a safe way to make a payment and this is what the seller said me :

“Hello,

Regarding payment, I prefer Alibaba Payment (Alipay). We need a safe way to conduct this transaction. Alibaba offers purchase protection plans for these situations. They will decide how you pay me so you can be insured for the entire value of this purchase. In case you don’t get what you are paying for, you get a full refund from Alibaba.

Alibaba (Alipay) Payment provides an escrow payment service that reduces transaction risk for online consumers. Shoppers have the ability to verify whether they are happy with goods they have purchased before releasing funds to the seller.

I will contact Alibaba and they will get back to us when the needed verification are done and you got the purchase protection. You will be able to verify the validity of your purchase protection after you have qualified for it. They will give us a transaction number. Should a refund be needed (I doubt that), you email them the payment proof and the transaction number in order to get your money back.

Thanks for the article. I think I missed something. How do you actually order Trade Assurance? — just select an Alibaba company that has Trade Assurance? Is there a check box? Do you have to request it in a certain way? Is it part of the checkout?

You can ask supplier to create the order in Trade Assurance system on Alibaba OR you can start the order yourself – directly on Alibaba, rom a product page from a supplier who takes part in Trade Assurance program.

Thank you for the important information. However I have a question regrading the transaction amount if there is no number there does that mean the seller haven’t sold any of that item even though it says 6 year gold supplier

Thanks for providing that nice content to everyone.
I’ve heard before that Alibaba Trade Assurance works only with 100% payment in advance.
Could you give me a hint on how to set up the payment and contract, so I can do 50/50 with second payment released after succesfully passed quality inspection in China?

A supplier I am negotiating with has the “Trade Assurance” symbol on their profile, however they are asking me to pay via direct wire to their bank, saying it is their company policy NOT to use the Alibaba payment system.

This seems like a something a fraudulent person would do. If they have the symbol, are they required to offer to use the Alibaba payment system?

My supplier just slapped a 3% Alibaba handling fee on my invoice. When I called Alibaba, I was told that sellers have to pay 3% for Trade Assurance and I guess it just got downloaded to me. Have you heard of this 3% TA fee before?

I also have concerns about the 2.8% processing fee that Alibaba claims on its website and by its employees that it all goes to the bank and therefore no invoice or document:

Do you know the veracity of this statement? Is there overhead built-in to this fee?
My VISA card company confirmed that it was not the one charging the 2.8%. My VISA card company charges its own fees plus currency exchange on top of the 2.8%.

Is this 2.8% a merchant-side fee plus some Alibaba fees that’s being offset to the buyers? Since Alibaba’s website is the platform that calculates and charges it, should it be possible for Alibaba to issue an invoice or a receipt?

Currently, all one has is the contract with the actual agreed upon cost and a VISA statement that shows a sum with 2.8% built-in plus all the other fees. The difference between the two amounts is nowhere accounted for in writing.

What are your thoughts on this lack of documentation for this hefty fee?

Those 3% supplier wants to charge – this is the fee (well, 2.8% to be exact) that SUPPLIER won’t receive from money you send, if you pay with a card on Trade Assurance.

There are no extra or hidden fees. Some suppliers will accept that 3% loss but many will just put it on the invoice, like in your case. But the money that shows in invoice is the money you’ll pay – there are no extra fees that pop up when you make the payment.

I have a quick question. I am currently negotiating with new suppliers on Alibaba. When they send the invoice, some tack on another 3%-5% to the total bill because they are stating that is the “transaction fee to receive the money. I thought that the money goes straight to their bank and the transaction fee is payed on the buyer side: $15 for e-checking or 2.8% for credit card payments.

If I was to pay with Paypal, I understand their concern. Can you please verify whether it costs the seller anything to receive the money? or are they just trying to squeeze more money out of me?

I am about to confirm a trade assurance order and I am curious about how shipping can be arranged. The seller says they have to use Alibaba’s freight forwarder and I would rather use mine. Will the seller be able to confirm that the goods have been shipped when they have been collected by the freight forwarder?

Hi Andrew,
I wanted to share my experience with Alibaba Trade Assurance with your readers. I have been an Alibaba free member for 6 years and have worked very hard to try to bring my product to market. I have had several successful transactions.

However, I paid a manufacturer/supplier last September (2016) and used Trade Assurance for the preshipment coverage. This supplier has delayed, asked for additional money on several occasions, refused to comply with our contract terms and failed 2 inspections.

I originally filed a dispute in April (2017) and even agreed to continue the contract, provided the supplier would fulfill my order. I have received NO help what so ever from Alibaba Trade Assurance. I have even agreed to pay to hire one of the three inspectors they use to determine quality.

At each turn, Trade Assurance deflects looks for ridiculous reasons (stated because I responded to the suppliers inquiry/ message I had resolved all issues- I acknowledged I recieved a spring I even paid to ship to the US after the one the supplier sent on my prototyoe rusted.) I have spent hours screen shotting and attaching Whatsapp, emails, inspection and photographic evidence to support my claim for the quality, supplier delays, and price increases.

I have complained to their help chat, and told “how sorry they were and how they will refer my order issues to a “higher team.” I finally felt like after months of the same refusal to help me that they would finally help, only to receive another email from same person stating that I would need to hire a quality inspection. I had already agreed to this in May 2017, they stated in a previous email that since I agreed they would help. Then the same person told me to begin again.

This process has been beyond frustrating and I am still out the $6000 USD that was supposed to be guaranteed against “quality issues, shipping delays and price increases.

I had believed they ( Alibaba Trade Assurance ) would issue a refund or the very least hold the manufacturer accountable to finish the order. Nothing has been done to protect me as a buyer.

I have thought about trying to hire a Chinese lawyer to help, do you think it would help? Or do you have any suggestions on how to proceed?

Thanks for sharing this with us and I’m sorry to hear about your bad experience…

Luckily neither I or my clients have never actually had to deal with Trade Assurance support as we make sure that supplier is legit and trustworthy and just use TA as a back-up protection. So unfortunately I don’t have any specific advice to give you here…

I don’t know whatever a Chinese lawyer can help or not as I haven’t been in a situation like this.

I have had a very similar experience with Trade Assurance. Trade Assurance is a mere scam there to protect the interests of the Chinese supplier.

They cannot seem to fathom evidence provided and in my case, Alibaba Trade Assurance commanded me to return the purchased product without a 3rd party inspection. When I insisted on a 3rd party inspection Alibaba responded they cannot help me if I insist on it.

Today, 8 months later, I have returned the product upon Alibaba’s instruction, the seller is claiming that it is not in the same condition, and Alibaba refuses to have my money refunded.

In essence, Trade Assurance is a Sham! I DO NOT RECOMMEND ANYONE TO USE TRADE ASSURANCE, AS THERE IS ZERO ASSURANCE HERE.

I have a package I have not recivied, the seller just doesn’t want to ship it, even though it was payed months ago .. so a scam. So of course I open a dispute and ask for a full refund. Alibaba then proceeds to talk chinese to the seller in the dispute and just closes it again??? Now I’ve opened a new one, but how is that going to go any different? It seems the buyer protection is no protection at all. I’ll never use Alibaba agin, that’s for sure, the site seems to actively work with scammers ….

can you please explain, the citi bank account. is this an account that alibaba requires all TA companies to open ? or is this alibabas account and they forward the money to the company?
what if the company doesn’t have a citi bank account?
i had a factory that claimed that they don’t have a citi bank account even they had the TA icon, (i paid with pay-pal in the end).
does the citi bank account belong to Alibaba and they forward the money to the companies bank account or does the money arrive to the companies regular bank or do they have a special account with citi bank just for accepting trade assurance orders.
i don’t get the whole thing with the citi bank from what i understood dealing with suppliers is that they don’t actually have a citi bank account,
so please could you explain how does the money get to them when i make the payment to the account that Alibaba provides
thank you very much